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A new renewable energy company, CleanTech. is building its first plant in the Tampa Bay area where algae farms will turn sunlight into automotive biofuel.

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A new renewable energy company, CleanTech. is building its first plant in the Tampa Bay area where algae farms will turn sunlight into automotive biofuel. Selena, an IE working for CleanTech, has been tasked to evaluate 2 different mutually exclusive plans with a 15-year horizon (analysis period), Cleantech seeks a MARR of 12.89%. The federal corporate income tax rate is 21.00%, and Florida's state corporate income tax rate is 3.535%. Determine the best course of action for Cleantech. Plan A: This plan will yield 6.4 million gallons of biofuel per year. Initially, the green technology Equipment Ala 5-year property class, but a useful life of 15 years) will cost $2.5 million plus installation costs of $125,000. Equipment A will receive a 40% bonus depreciation in Year 1. First-year annual operating costs will be $22.5 million and increase each year after that by $250.000. This plan will produce biofuel worth $38.9 million in revenue the first year and will increase in revenue by 9% each year thereafter Plan B: This plan will yield 8.4 milion gallons of biofuel per year. Initially, the green technology Equipment Bla 5-year property class, but a useful life of 15 years) will cost $1.5 million plus installation costs of $325,000. Equipment will receive a 40% bonus depreciation in Year 1. First year annual operating costs will be $33.5 million and increase each year after that by $150,000. This plan will produce biofuel worth $45.7 million in revenue the first year and will increase in revenue by 9% each year thereafter. Answer the following questions in your Excel file: 1) Calculate the combined incremental tax rate. Show your work 02) Calculate the value of the bonus depreciation for both Equipment A and Equipment B. Then, calculate the new Cost Basis for both Equipment A and Equipment that will be subject to MACRS depreciation, Show your work for both Equipment A and Equipment B. 03) In a table, determine the After Tax Cash Flow for Plan A Be sure to include and/or calculato: 1) Before Tax Cash Flow (untaxed and taxable) 2) Bonus Depreciation 3) MACRS Rates, 4) MACRS Depreciation, 5) Taxable income, 6) Income Taxes que combined incremental tax rate), and 7) After Tox Cash Flow as vertical columns Q4to a table, determine the After-Tax Cash Flow for Plan B. Be sure to include and/or calculate: 1) Before-Tax Cash Flow (untaxed and taxablo). 2) Bonus Depreciation 3) MACRS Rates4) MACRS Depreciation 5) Yaxable income, 6) income Taxes (use combined incremental tax rate), and 7) After Tax Cash Flow as vertical columns Q5) Which Plan should CleanTech choose according to After-Tax Present Worth Analysis? WHY? You must show all calculations and explain to receive full credit. 061 Which Plan should Cleantech choose according to After-Tax Annual Cash Flow Analysis? WHY? You must show all calculations and explain to receive full credit on which plon should Cleantech choose according to After-Tox Rate of Return Analysis? WHY? You must show all calculations and explain to receive full credit

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